Recently, HDB announced a change (yet again) in the system for 1st timers getting a flat. The main reason is that sales for some of the Build to Order at 'prime' locations in Seng Kang and Punggol, just to list a few, was meet with poor response (with a take up rate of less than 50%) when many applicants applied for the flats. So they decided to remove the 1 year 1st timer priorities if home seekers reject the chance to book a flat 2 times after getting a good ballot number. See press release.

I felt that HDB is tackling the wrong problem when they decided to take such 'knee jerk' reactions to the poor response when they should be reflecting on the reasons why people do not take up the flats instead. And here's my reason why I find such BTO flats not desirable at all.

1.) Deliver date 2012 - It's 4 years from now and who knows what will happen to the price of flats (maybe able to get it cheaper in the future if economy is bad) or what might happen to the relationship between the couple if they are not married. The housing demand is now, and HDB's response to the demand now is to offer flats in BTO scheme mostly and will take 3-4 years at least to complete. No policy change now will affect the demand now. If you include collection of keys and completion of renovation, that could mean 5 years before moving to your new home!

2.) Only 5-10% of the units are truely desirable units - If I'm going to pay for a flat that will be delivered in 2012, I will want only the best unit to justify my waiting time. Best unit to me is a unit with view, highest floor, no afternoon sun etc.. only a few % of the flats will fit the criteria and once those units are snapped up, I may rather spend the 4 years searching for resale or waiting for another chance.

3.) Location of the units (too near schools, not so popular LRT system servicing the areas etc, many proposed developments but as Singaporeans realized, may or may not be developed at all).

I believe the demand is real, but the supply fails to meet the expectations for demand. For many couples who do not date for more than 4 years before getting married, there is no way for them to book a flat 4 years in advanced. And for those of them who are ready to get married, they will want to book a flat that is available now. BTO is meant to solve a problem of building too many flats that nobody wants. But we can't blame Singaporeans for being picky, after all for most Singaporeans, a flat represent the largest investment we make in our life.